The chart captures several yield curve inversions—where 2-year yields exceed 10-year yields—which have historically preceded recessions. Notable inversions occurred in 2019 (before the COVID recession) and a deeper, more persistent inversion in 2022-2023. Bitcoin's performance during these periods has been mixed: it rallied throughout much of the 2019 inversion but struggled during the 2022 inversion as the Fed aggressively raised rates. The zero-bound period of 2020-2021, when yields were at historic lows near 0%, coincided with Bitcoin's strongest bull market, suggesting that ultra-low yields may benefit Bitcoin by reducing the opportunity cost of holding non-yielding assets.

The most dramatic spike in the Financial Stress Index occurred during the March 2020 COVID-19 market panic, when it briefly exceeded levels seen during the 2008 financial crisis. Bitcoin crashed substantially during this acute stress period but recovered much faster than traditional markets once the Fed intervened with unprecedented stimulus. Earlier stress episodes like the 2018 Q4 market correction also saw Bitcoin decline alongside rising financial stress. The 2023 regional banking crisis (Silicon Valley Bank failure) caused a smaller stress spike, during which Bitcoin actually rallied, potentially indicating an evolution in its market perception toward being a beneficiary of banking system stress.